Morningstar Reports Hedge Fund Performance for Year-End '09

Morningstar, Inc. (NASDAQ: MORN ), a leading provider of independent investment research, has reported preliminary hedge fund performance for the fourth quarter and year-end 2009 and asset flows through November. Although December proved relatively uneventful for hedge funds, 2009 turned out to be the best year since 2003. The Morningstar 1000 Hedge Fund Index gained only 0.1% in December, but ended the year up 19.5%, missing 2003's 20.3% rise by a small margin. Similarly, the currency-hedged Morningstar MSCI Hedge Fund Index rose just 0.2% in December, but finished the year up 14.1%. The second and third quarters of 2009 generated the most profit for hedge funds, as the global recovery in stocks and bonds waned toward year end. The Morningstar 1000 Hedge Fund Index and the Morningstar MSCI Hedge Fund Index rose 2.1% and 1.9%, respectively, in the fourth quarter, while the MSCI World Stock Index gained 4.1% and the BarCap Global Aggregate Bond Index declined 0.9% over the same period. "2009 was a windfall year for hedge funds," said Nadia Papagiannis, alternative investment strategist at Morningstar. "The hedge funds that survived 2008's industry purge, or those that launched in the aftermath, picked up assets at rock-bottom prices and rode the recovery to near record profits, particularly in U.S. equity and debt markets."